According to an article published in the Wall Street Journal (WSJ: 29 September 2016) South Africa’s Competition Commission SACC) has carried out search and seizure operations at the local offices of five of the world’s biggest shipping lines, while investigating price-fixing claims. The regulator has raided the Western Cape and KwaZulu-Natal offices of the five companies under investigation.

This after the South African regulator imposed an US$8.5m fine on Japan’s Nippon Yusen Kabushiki Kaisha for colluding with competitors in shipping vehicles.

It says, “The commission has reasonable grounds to suspect that [these companies] have engaged in collusive practices to, inter alia, fix the incremental rates for the shipment of cargo from Asia to South Africa in contravention of the Competition Act.”

The companies affected are

Germany’s Hamburg Sud South Africa (Pty) Ltd.

Denmark’s Maersk South Africa (Pty) Ltd.

Geneva-based Mediterranean Shipping Company (Pty) Ltd.

France’s CMA CGM Shipping Agencies South Africa

South Africa’s Safmarine (Pty) Ltd. (a Maersk subsidiary.)

The SACC seized both documents and electronic data to investigate whether the companies have indeed violated the national Competition Act.

“South Africa is a strategic hub for the trade of goods in and out of the Southern African region. Any cartel by shipping liners in this region results in inflated prices for cargo transportation,” the SACC commissioner Tembinkosi Bonakele said. “Cartels of this nature increase the costs of trading in the region and render the region uncompetitive in the world markets. Such cartels have the effect of significantly derailing the economic growth of the region.”

So far CMA, Hamburg Sud and Maersk have confirmed that they are co-operating with the regulator’s investigation.

The WSJ claims that Maersk, MSC and CMA CGM — the world’s three biggest players in the industry — are often subject to price-fixing investigations by global regulators, but such probes can take years to be concluded and with freight rates hovering around record lows, cartel charges are difficult to prove – so much so that the European Commission closed a three-year probe on the pricing of 14 container liners in July of this year. It did so without imposing any penalties, although the carriers did undertake to make the freight rate setting practices more transparent.